Morningstar's evaluation of this fund's process aims to determine whether it has been applied consistently over time, as demonstrated by the portfolio's composition, its suitability for different types of investors, and expectations for performance in different market conditions, assuming the process is adhered to. JPMorgan International Equity Fund earns an Above Average Process Pillar rating.
This strategy skews toward larger, growthier companies than its average peer in the Foreign Large Blend Morningstar Category. Looking at additional factor exposure, this strategy has a defensive tilt owing to its exposure to high-quality stocks. This means the fund holds consistently profitable, growing companies with solid balance sheets that may help it endure downturns better than Morningstar Category peers. The strategy is also historically more exposed compared with Morningstar Category peers. The managers have not exhibited a preference for or aversion to yield; the current portfolio has about average exposure. High-yield stocks tend to be more mature and less volatile, unless they cut their dividends. But when compared with category peers, the strategy historically has had less exposure. Additionally, the managers do not tilt in favor of or against bearing liquidity risk, the current portfolio bears about average exposure compared with other equity strategies. Although there is some evidence to indicate investors earn a premium for shouldering this risk, in the case of a bear market, less-liquid assets are more difficult to sell without adversely affecting prices. More information on a fund and its respective category's factor exposure can be found in the Factor Profile module within the Portfolio section.
The portfolio is overweight in financial services by 3.3 percentage points in terms of assets compared with the average portfolio in the category, and its energy allocation is similar to the category. The sectors with low exposure compared to their category peers are consumer cyclical and real estate, with consumer cyclical underweighting the average portfolio by 3.4 percentage points of assets and real estate similar to the average. The strategy owns 76 securities and is relatively top-heavy. Of the strategy's assets, 28.7% are concentrated within the top 10 holdings, as opposed to the category’s 14.7% average. And in closing, in terms of portfolio turnover, this fund trades less frequently than the category’s average, potentially limiting costs to investors.